The drive to alternative fuels

Greenies, tree-huggers, granolas and old hippies are mothers, dads and grandmoms too. And there is a sincere desire to live and raise our children in a cleaner, safer, sustainable world. But until we greenies achieve the economical and political clout of Exxon-Mobile, Toyota and/or the governments of the G8 countries, face it, it will be utility, power and profit that will fuel the move to alternative energy.

Now the heads of energy corporations around the world and the heads of the G8 countries and emerging “big energy” players like China and India all know that fossil fuel is a limited commodity – there is only so much of it. But as the saying goes – the devil is in the details. How much is really left? How expensive will it get to produce and who can afford to bear the cost? Not to mention, is it worth fighting over? Like it or not, these are the sorts of questions that will lead us to alternative fuels.

Here in the U.S. where so much innovation is based on profits, the real arm-twisting (read lobbying, marketing and incentives) is just beginning and it seems, at least initially that biofuels have a leg-up.

The reason for this is infrastructure — the ability to produce and distribute alternative fuels. Biofuels like biodiesel and ethanol can be plugged in to the existing infrastructure. The development of effective, efficient batteries to make long-distance, high-performance electric travel appealing and a template for hydrogen fuel cells are somewhat hampered by the infrastructure issue.

The economics and politics of alternative fuels are inextricably linked. Subsidies and corporate and governmental grants and/or incentives are a large part of the mix. Ethanol is enjoying a lot of favorable attention right now because of Senate Bill 987 (mandating at least 15 billion gallons of ethanol per year by 2022) and current federal subsidies of 51 cents per gallon.

Many energy companies that enjoy connections to the current infrastructure are tossing their hats in the alternative fuels race through more monies devoted to company research and development plus offering grants to outside research. BP just signed a $400 million deal with the University of California Berkeley for research into alternative fuels.

However, one of the major, if not the major, energy corporations in the world — the $440-billion Exxon-Mobile Corp. — is presently eschewing any alternative energy plans. “I don’t have a lot of technology to add to moonshine,” Exxon-Mobile’s new CEO Rex Tillerson was quoted as saying recently on CNN Money.com.

Tillerson seems to be relying on research from MIT, University of Maryland, Stanford and others that agree that fossil fuel will be the world’s foremost supplier of energy through the 21st century. These reports predict that fossil fuel will produce between 70 and 80 percent of the world’s energy in 2100, compared to 90 percent today. Exxon’s own forecast doesn’t go that far but it predicts fossil fuel will produce 81 percent of the world’s energy in 2023, and it seems content to stay in the gas and oil business.

Will alternative fuels replace fossil fuels? They have to, as fossil fuels are finite. The question remains when and how? Is the U.S. truly on the alternative fuels path now, or do alternative fuels simply make good talking points for the 2008 elections?

And there is a “wild card” in the deck. Coal is cheap and plentiful and there are whispers of “clean” coal. Could all this rhetoric about the costs that will be incurred and the new technology needed to mass-produce alternative fuels actually be an end-run, straight for the coal pit?

Starting next week and continuing for a few weeks we will pick a couple of alternative fuels and discuss the pros and cons and the difficulties and likelihood for mass production.